Medical device companies cheered the Obama administration's ambitious, $1 billion program to cut hospital readmissions and health care-associated infections.

On Tuesday, the administration unveiled its public-private Partnership for Patients: Better Care, Lower Cost, with the twin goals of decreasing hospital-acquired conditions by 40 percent and cutting hospital readmissions by 20 percent by the end of 2013 (all figures are compared with 2010 rates).

The administration believes this will save 60,000 lives a year and reduce costs to Medicare by $10 billion over the next three years. Over the next decade, it could save Medicare $50 billion.

Medicare will spend $1 billion, set aside from the Affordable Care Act, to support doctors and clinicians in safety efforts. The Centers for Medicare and Medicaid Services said $500 million will go to test safer care delivery models, and another $500 million will be used for community-based programs to help Medicare patients at high risk for readmission transition from the hospital to other care settings.

Dr. Steven Brotman, senior vice president for payment and health care delivery policy with Advanced Medical Technology Association (AdvaMed), a device lobby, said device innovations "will play a critical role in making these goals achievable," particularly for conditions such as surgical site infections, central line-associated blood stream infections and falls.

"We look forward to working with [the Department of Health and Human Services] and CMS to achieve the goals set by the Partnership for Patients initiative and to reviewing the details of the program," he said in prepared remarks.

More than 500 hospitals and various medical societies, clinics, companies and consumer groups have already taken the Partnership for Patients safety pledge. According to a tally on the healthcare.gov website, signatories include the Catholic Health Association of the United States, American Academy of Family Physicians, General Electric Corp. and Wal-Mart Stores Inc.

An article in the April issue of Health Affairs estimates the U.S. bill for medical errors totaled $17.1 billion in 2008. Another article, cited by HHS Secretary Kathleen Sebelius in announcing the new partnership Tuesday, found that errors or adverse events occur in one out of three hospital admissions.

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